HDFC Bk pips ICICI Bk as top corp bond arranger Oct
Informist, Thursday, Nov 23, 2023
By Subhana Shaikh and Asmita Patil
MUMBAI – HDFC Bank Ltd overtook ICICI Bank Ltd as the top corporate bond arranger in October, by managing eight deals worth nearly 24.50 bln rupees, according to data compiled by Informist. HDFC Bank was in third position in September.
BOND CLUB
So far in the current financial year, this is the second time that HDFC Bank has stood first among arrangers, while ICICI Bank has claimed first place four times. What catapulted India's largest private sector bank to the top of the league table was the large-sized bond offerings that it jointly managed for big-ticket state-owned issuers and non-banking financial companies.
Of the total 24.50 bln rupees, HDFC Bank solely managed a 1.5-bln-rupee bond deal for Kotak Mahindra Prime Ltd.
ICICI Bank, which maintained its top spot for the last two months, fell to the second position in October. The private sector lender helped raise a total of 15.26 bln rupees through eight deals.
In a surprise move, Trust Investment Advisors Pvt Ltd occupied third place last month by mobilising 11.34 bln rupees through 14 bond deals--the highest number of deals managed by any arranger during the month. Of the total deals arranged, Trust Investment Advisors managed three bond deals for Bhansali Infra Projects Pvt Ltd, SMFG India Credit Co Ltd, and Avant Heritage-III Realty Pvt Ltd worth 640 mln rupees. The merchant banker ranked sixth on the league table in September.
YES Bank Ltd claimed the fourth position by managing four bond deals totalling 8.75 bln rupees. SBI Capital Markets and ICICI Securities Primary Dealership Ltd secured the fifth position, having mobilised 6.35 bln rupees each.
In October, fundraising through private placement of corporate bonds fell sharply by 40% from the previous month as most big-ticket issuers shied from the market because of the rise in borrowing cost.
Corporates, financial institutions, and state-owned entities raised a total of 405 bln rupees through 208 bond offerings, compared to 674.89 bln rupees through 286 bond issuances in September, according to data sourced from the National Securities Depository and compiled by Informist. On a year-on-year basis, the funds raised through corporate bonds fell 12% last month.
Yields on corporate bonds issued by National Bank for Agriculture and Rural Development rose 10-15 basis points across tenures in October after the Reserve Bank of India indicated in its monetary policy that tight liquidity conditions would prevail.
In the press conference after the policy announcement, RBI Governor Shaktikanta Das said the central bank would conduct open market operations through auctions. The announcement surprised bond market participants as liquidity in the banking system was already in deficit and typically, cash withdrawals rise between October and May due to festivals and weddings, leading to a reduction in durable liquidity, dealers said.
At the end of October, liquidity in the banking system was estimated to be in a deficit of 1.44 trln rupees, against a deficit of 867.10 bln rupees in the previous month.
During the month, market participants remained jittery owing to the relentless rise in US Treasury yields and growing uncertainty over the RBI's open market operation sales, keeping yields at elevated levels and increasing the mismatch in expectations between issuers and investors.
End
NOTES:
* Based on data compiled by Informist from published news reports
* May not include all the deals struck during the month/quarter
* Banker who arranged the highest quantum of deals, irrespective of the number of deals, is ranked first
* Deals executed directly with investors are not considered
